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What is globalization?

       In a sense, there is nothing new about globalization. Ever since human
beings have exchanged goods, there has been trade among peoples. By the end
of the nineteenth century, world trade was already an unmissable feature of the
new capitalist world order – and the first global trade unions, the international
trade secretariats (now known as global union federations) were born in that
era. So what is new?

       For the last several decades, and particularly since the end of the cold war
in 1989-91, there has been an unprecedented expansion of cross-border
investments combined with a world-wide shift toward privatization,
deregulation and free markets. Central to this process have been a number of
trends: a gigantic growth in foreign direct investment (FDI), the liberalization of
international trade, massive cross-border financial flows and a revolution in
information and communication technology. This process has become known
as ―globalization‖ -- and the word itself became popular in the 1990s.

        The liberalization of capital markets around the globe has meant that
increasingly wealth flows freely across borders, and giant global corporations
can invest where they want – wherever they stand the chance of reaping profits.
It is this growth of foreign direct investment more than anything else that
characterizes the new era and distinguishes it from previous periods.

        While traditional trade between countries has greatly increased in the
past several decades, the growth of foreign direct investment has grown even
faster. But despite attempts by nearly all countries to attract such investment, it
remains highly concentrated in only a few countries. The main recipients of FDI
in the 1990s were China, Brazil, Mexico, Singapore and Argentina. In fact, the
top twelve countries and territories attracted nearly three-fourths of all foreign

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
direct investment. Entire regions of the world – in particular Africa – have
been nearly completely excluded from this process, attracting little of that

       New global production systems have also appeared, spearheaded by
multinational enterprises (MNEs), of which there are some 65,000 today, with
850,000 foreign affiliates. These systems have become significant in many
sectors of the global economy including high-tech industries, labour-intensive
consumer goods such as clothing and shoes, and even in the service sector (call
centers being a prominent example).

       The new globalization is also distinguished by the emergence of a
massive, high-speed, inexpensive global communications network – the
Internet – which has accelerated everything. Bill Gates of Microsoft has written
about ―business at the speed of thought‖ and his company – whose products are
used in offices in every country – symbolizes the change. The Internet is the
most significant part of a change that also includes the proliferation of cellular
phones, satellite television and other new technologies that did not even exist
twenty five years ago.

       There are other aspects to globalization as well as the purely economic
ones – for example, the globalization (and to a certain degree, homogenization)
of culture, including not only music, film and literature, but even the foods we
eat and the clothing we wear. In many countries it is this aspect of globalization
which appears most threatening as local cultures and even languages appear to
be challenged by a new global culture, one dominated by the English language
and largely American cultural products.

       Many concerns have been expressed about globalization by unions and
others. The International Labour Organization sponsored a World Commission
on the Social Dimension of Globalization which produced its report – A Fair
Globalization: Creating Opportunities for All – in 2004. The Commission,
which consisted of prominent representatives of business, unions and
government from the developed and developing world, called for the benefits of
globalization to be shared more equally among nations and within nations.

       The commission expressed a number of concerns about globalization,

      Economic growth (as measured by gross domestic product) since 1990

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
       has actually slowed down. This is not what globalization's advocates
       would have predicted.

      That growth is uneven, with some economies (such as China's) growing
       at unprecedented rates; the vast majority of developing countries
       growing quite slowly; and 23 countries actually experiencing negative
       economic growth.

      The income gap between rich and poor countries is growing.

      Short-term, speculative flows of capital have been prominent features of
       the new globalization and these have damanged the economies of
       developing nations.

      Unemployment rates have grown in the formal economies, as has self-
       employment. The unregulated, informal economy has grown quickly.

      While the absolute number of poor people has declined worldwide,
       nearly all of that decline is due to economic growth in one country –
       China. In many parts of the world, poverty continues to grow.

       The commission also noted many positive benefits to globalization,
including an improvement in the quality of democracy and the forging of a
greater sense of global community. It emphasized that there is no possibility of
reverting to an earlier era, of stopping globalization, and focussed instead on
proposals and recommendations to achieve a fair globalization. These included:

      Improved governance at national and local level based on democracy and
       respect for human rights. Nations must provide essential services and
       social protection to their citizens, integrate the informal economies,
       promote sustainable development, make decent work a key goal of
       economic policy, empower local communities and so on.

      At global level, the commission called for a number of reforms including
       reducing unfair barriers to market access (for developing countries), a
       more balanced strategy for growth and full employment, fairer rules for
       intellectual property, a more consistent and coherent framework for FDI,
       and reforms to the international financial system ensuring greater
       participation by developing countries.

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
     Of specific interest to trade unionists will be the Commission's
recommendations on labour issues. These include the following:

      Reinforce the capacity of the International Labour Organization to
       promote respect for core labour standards. All relevant international
       institutions should play their part in promoting those standards.
       Technical assistance programs and training toward this end should be
       promoted. Where persistent violations of rights continues, the ILO
       should take action to secure compliance.

      Create fair and transparent rules for the cross-border movement of
       people, particularly protecting the rights of migrant workers and
       combatting trafficking, especially of women.

      Establish a global forum for exchanging views and information on cross-
       border migration issues.

       Unions have specific reasons to be concerned about the new
globalization, as well as sharing concerns expressed by others. Central to union
concerns is a fear that globalization means a ―race to the bottom‖, a world-wide
lowering of wages and labour standards and a decline everywhere of
independent, democratic trade unions.

        If corporations are free to always seek cheaper sources of labour, there is
a fear that capital will flee high-cost developed countries where unions remain
strong and flow toward union-free ―export processing zones‖ and other havens
of low-wage, union-free economies. Were that to happen, it would spell doom
for unions everywhere.

The international trade union movement

       Long before anyone spoke about globalization, there was already an
international trade union movement.

       The International Workingmen's Association (known as the ―First
International‖) was established as far back as 1864. By the beginning of the
twentieth century, the international trade union movement was already a well-
established force – and was coping with an earlier, different kind of

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
       The two world wars, the rise of fascism and the cold war all disrupted the
steady progress of that movement, but today the international trade union
movement is more united and larger than ever before in its history.

      The recent merger of the International Confederation of Free Trade
Unions (ICFTU) and the World Confederation of Labour (WCL) into the
International Trade Union Confederation (ITUC) has created an organization
representing 168 million workers in 155 countries and territories, with 311
national affiliates. Those affiliates are national trade union centers – unions of
unions in various countries.

        In addition to the ITUC, the World Federation of Trade Unions (WFTU)
continues to exist, though following the collapse of the Soviet bloc, it has
significantly declined in size and influence. Accurate figures for its membership
are difficult to obtain.

      Several large national trade union centers remain outside both the ITUC
and WFTU, including Change to Win in the United States and the All China
Federation of Trade Unions, which claims to be the largest union in the world,
representing 134 million members.

        The ITUC works closely with the autonomous Global Union Federations
(GUFs) which are international federations consisting of national trade unions
operating in specific sectors of the economy. These federations operate on the
front lines of the struggle over globalization – they are the labour movement's
tool for dealing both with multinational corporations and international
institutions such as the ILO. Global campaigns are often run through the GUFs,
and the GUFs together with the ITUC develop the labour movement's positions
on issues of global importance.

       Today there are ten GUFs – a decline in recent years following the
mergers of a number of GUFs. These include the Education International,
International Metalworkers Federation, International Federation of Journalists,
International Union of Food Workers, International Federation of Chemical
Energy and General Workers, Building and Woodworkers International,
International Textile, Garment, and Leather Workers' Federation, International
Transport Workers Federation, Union Network International, and Public
Service International. Collectively, they represent tens of millions of organized
workers around the globe.

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
       The Trade Union Advisory Committee (TUAC), founded in 1948 to
advise the OECD, is another important international body, representing 58
national trade union centers and 66 million workers in unions in the world's 30
major economies.

       Regional trade union bodies play an increasingly important role. The
ITUC has its own regional organizaitons for the Americas, Africa, and the Asia-
Pacific region. In addition to these, most European unions are affiliated to the
European Trade Union Confederation (ETUC), which was founded in 1973.

       It's important to understand the difference between the types of
international structures of the trade union movement.

       On the one hand, organizations like the ITUC and its regional bodies, as
well as TUAC, consist primarily of national trade union centers, such as the
AFL-CIO in the United States, the Canadian Labour Congress, the Trades Union
Congress in Britain, LO in Sweden, the DGB in Germany, the CGT in France, the
FNPR in Russia, COSATU in South Africa, ACTU in Australia, Rengo in Japan
and the KCTU and FKTU in South Korea. Individual national unions, with rare
exceptions, do not affiliate to these bodies.

       The ten Global Union Federations, on the other hand, consist entirely of
individual national unions – such as a teachers' union in a particular country, or
a union of miners.

       This has led to an informal division of labour at global level, with
organizations like the ITUC, ETUC, and TUAC dealing directly with global
public institutions such as the United Nations and World Bank, while the Global
Union Federations deal directly with transnational corporations. Still, there is
considerable overlap between the work done by the various bodies, and a great
deal of cooperation among them. In recent years, they have gone so far as to
attempt to create a global ―brand‖ for the trade union movement -- ―Global
Unions‖ -- with its own website.

International labour standards

       Central to the labour movement's activities in the era of globalization are
the international labour standards set out by the International Labour
Organization (ILO).

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
       Of the four key areas covered by the ILO's core conventions, unions are
most concerned with the ones guaranteeing trade union rights and collective
bargaining – conventions 87 (Freedom of Association and Protection of the
Right to Organize, 1948) and 98 (Right to Organize and Collective Bargaining,

       These conventions and other key instruments came into existence with
union support and are the cornerstone of union campaigns in the new era of

       While no one claims that these conventions represent enforceable
international law – after all, countries continue to violate basic workers' rights
decades after their adoption, even countries which have signed up to those
conventions – they are still a powerful expression of an international consensus
on what is permitted and what is forbidden in the workplace. And that
international consensus says that workers have a right to join and form trade
unions – a right that is recognized in the Universal Declaration of Human
Rights, adopted by the United Nations in 1948.

       These international labour standards give unions both a target to achieve,
and a powerful tool to expose, violations of workers rights. This can be done
through the International Labour Organization itself, and both the ITUC and
global union federations have increasingly done so.

         Unions use the ILO's annual international labour conference to raise
issues of rights violations around the globe, and also use the ILO's freedom of
association committee to do so. There is a well-established procedure in place
to file complaints, and the global union federations in particular have
considerable experience with this.

       The ILO's Bureau for Workers' Activities, known by its French acronym
ACTRAV, is the main link between the International Labour Office (the
organization's permanent secretariat) and labour organizations. ACTRAV is
based in Geneva, with regional offices around the globe and an international
training programme in Turin.

       Its activities include international campaigns to promote the ratification
of ILO conventions, organizing seminars and conferences on subjects of interest
to workers, making representations to governments regarding their
commitments to respecting international labour standards, organizing technical

         Workers' Activities Programme (ACTRAV) ILO International Training Centre
cooperation in the field, and training trade union leaders.

Global governance

       While there is no world government, there are a number of global
institutions which have come into existence in the last six decades – institutions
whose role it is to regulate globalization.

       The first of these, known as the international financial institutions, are
the International Monetary Fund (IMF) and the World Bank. Both were created
towards the end of the second world war at a conference in Bretton Woods, in
the USA. They both aim to ensure financial stability and economic growth
around the world.

       The IMF specifically focusses on the stability of the international
monetary and financial system. It does this by monitoring and advising
countries on policies that are conducive to its goals, by providing technical
assistance to those countries, and by providing financial assistance.

        The World Bank, which cooperates closely with the IMF, promotes long-
term economic development and poverty reduction. For example, it builds
schools and health care centers, provides clean water and electricity, and helps
fight the spread of disease.

       Both institutions have come under heavy criticism by unions and others
in recent years for seeming to impose a ―neo-liberal‖ agenda on countries in
exchange for the services they offer. That agenda includes privatization of what
were previously public services, labour market flexibility, liberalization of
capital flows and trade, pension reform, and restrictive fiscal and monetary
policies. These are often seem to work to the detriment of working people and
the poor.

      The international institutions of the labour movement – in particular the
ITUC, TUAC and the global union federations – have increasingly attempted to
engage the IMF and World Bank in dialogue, with some success. There are
more consultations with unions at country level as well.

       The biggest success unions have had with these insitutions has been to
get them to state their commitments to promote core labour standards as part of
their poverty reduction mandates. This has been reflected in a number of World

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Bank publications.

      Another major player in the field of global governance has been the
more-recently founded World Trade Organisation (WTO), the successor to the
General Agreement on Tariffs and Trade (GATT), which deals with trade
between countries. It aims primarily to liberalize trade and reduce tariffs.

      Unions have encouraged the WTO to include a ―social clause‖ in trade
agreements to guarantee the rights of workers. The international trade union
movement has pressured the WTO on a number of issues, including:

      Calling for the reduction – or elimination – of agricultural export
       subsidies in developed countries.

      Dealing with the massive rise in unemployment due to the phasing out of
       the WTO's agreement on textiles and clothing.

      Coping with problems raised by intellectual property rights, and in
       particular, better and cheaper access to medicines to combat HIV/AIDS
       and other health problems in the developing world.

      Making sure that privatisation of public services, especially in education
       and health, is not seen as the solution to all problems.

       While at the global level, institutions like the IMF, World Bank and WTO
have been the subject of trade union pressure to recognize workers' rights and
combat social injustice, unions have had considerably more success at regional
level – most notably in the European Union. For many years now, workers'
rights have been incorporated into European law, and European Works
Councils represent an innovative approach to involving workers and their
unions in the management of companies.

Unions and globalization: dialogue and conflict

       Many methods have been proposed to give globalization a ―human face‖ -
- to ensure that governments and corporations behave responsibly and in the
interests of society as a whole. Pressure exerted on global insitutions like the
WTO, IMF and World Bank is one way.

       Others include the promotion of corporate social responsibility (CSR),

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framework agreements between global union federations and multinational
enterprises, and global campaigns.

        Corporate social responsibility has become increasingly fashionable in
recent years as corporations seek to promote a better public image. This is often
done through annual reports and so-called social audits which reveal the extent
to which a corporation promotes broadly-accepted values such as sustainable
development, human rights, and so on. Unions have been very critical of CSR,
seeing it as a poor substitute for genuine social dialogue and truly independent
verification of corporations' compliance with accepted standards.

       Instead, the ITUC and global union federations have advocated a central
role for trade unions, arguing that there can be no more effective monitor of
corporate behavior than independent and democratic trade unions.

       There have been an increasing number of framework agreements signed
in recent years between multinational enterprises and global union federations.
The agreements vary widely in scope but usually include a corporation's
acceptance of a legitimate role for unions and a recognition of core international
labour standards, often mentioning ILO conventions 87 and 98 specifically.

       One of the first such framework agreements was signed in August 1988
between Danone, the French-based food multinational, and the IUF, the global
union federation for the food sector. This was followed by agreements with such
multinational enterprises as Ikea, Volkswagen, Daimler-Chrysler, Renault,
Chiquita, Carrefour and H&M.

        While some see these framework agreements as being the first steps
toward global collective bargaining, others have been more skeptical and in
some cases have suspended the pursuit of further agreements. While a national
collective bargaining agreement can be enforced both in a country's courts and
by effective union action in the field (such as strikes), there is no clear
enforcement mechanism for international framework agreements at present.

       In many cases, framework agreements and social dialogue are not
enough and unions are forced to launch global campaigns to pressure
corporations and governments – sometimes to recognize the most basic rights,
such as the right to join a trade union.

      Many such campaigns have targetted well-known multinational

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enterprises, while others have focussed on countries with a poor record of
respecting workers' (and human) rights, such as Belarus, Colombia, Iran and
Burma. (The ITUC publishes an annual report on violations of trade union
rights around the globe which is compulsory reading for those who care about
workers' rights.)

       Other campaigns have drawn attention to specific issues that span the
globe, such as child labour, HIV/AIDS or gender equality. Some campaigns last
only a few days while others have gone on for many years with no end in sight.

       Unions increasingly partner with others to reach a much wider public.
Amnesty International has worked closely with unions on campaigns which
focus on basic workers' rights, drawing attention to killings and imprisonment
of trade unionists. Unions also partner with NGOs that focus on particular
sectors, such as the Clean Clothes Campaign.

       The same information and communications technologies that have made
globalization possible – and in particular email and the world wide web – have
created a new kind of global campaign which takes place primarily online. A
number of the global union federations have launched such campaigns using
their websites and mailing lists, and several have partnered up with the news
and campaigning webiste LabourStart to bring their concerns to a global online

        These campaigns have had a powerful – and sometimes immediate –
effect in many cases, leading to the release of jailed trade unionists, bringing
corporations to the collective bargaining table, and achieving other union goals.
The involvement of hundreds of thousands of trade unionists in these
campaigns has created a world-wide grassroots activist network that was
unimaginable only a few years ago.Resources


World Commission on the Social Dimension of Globalization – established by
the ILO:—en/index.htm

Wikipedia entry:

Global governance:

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World Bank:

International Monetary Fund:

World Trade Organization:

Global unions:

International Trade Union Confederation (ITUC):

Trade Union Advisory Committee to the OECD:

Global Unions:

Global campaigns:


Amnesty International:

        Workers' Activities Programme (ACTRAV) ILO International Training Centre

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